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USDJPY Market Update

9/13/2022 11:32 AM

The US dollar shows a slight decrease, correcting after an uncertain attempt to grow the day before. The USD/JPY pair is holding close to the record highs that were updated last week, and the dollar "bulls" are waiting for new drivers to emerge.

The focus of the market is the meeting of the US Federal Reserve on interest rates, which will be held next week. Despite the signs of a slowdown in consumer price growth, the regulator still plans to raise the rate by 75 basis points, designating high inflation as its top priority for the moment. The Fed's Chairman Jerome Powell is not yet concerned about the threat of a recession, relying on macroeconomic publications that reflect the stability of the US economy.

The Bank of Japan, in turn, is in no hurry to tighten monetary policy. While the European Central Bank (ECB) is raising interest rates by 75 basis points, and the US Federal Reserve is preparing for a third adjustment of the value by a similar amount, the Japanese regulator keeps rates at negative levels, trying to get rid of deflationary phenomena in the economy. Meanwhile, markets are concerned about the unilateral weakening of the yen.

Macroeconomic statistics released today in Japan did not provide any tangible support to the national currency. However, the BSI Large Manufacturing Conditions Index rose by 1.7% in the third quarter after falling by 9.9% in the previous period.

Bollinger Bands on the daily chart show a steady increase. The price range is narrowing, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD is reversing downwards forming a sell signal (the histogram consolidated below the signal line). Stochastic shows a more confident decline, signaling in favor of the development of the downtrend in the nearest future.

Resistance levels: 143.48, 145.00, 146.00, 147.00. | Support levels: 141.50, 140.78, 139.67, 138.50.

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